- Asian equities trade lower amid the cautious mood.
- The lingering fears over China’s property market crisis dampen regional stock markets.
- A dovish stance from the BOJ boosts the Japanese equities.
- Investors await Japan’s Consumer Price Index (CPI) and, the US Core Personal Consumption Expenditure (PCE) Price Index on Friday.
Most Asian stock markets trade in negative territory on Monday amid the cautious mood. Investors digest the outcome of the Federal Reserve (Fed) monetary policy decision last week while the renewed concerns over China's property crisis weigh on risk sentiment.
At press time, China’s Shanghai is down 0.39% to 3,120, the Shenzhen Component Index declines 0.50% to 10,127, Hong Kong’s Hang Sang falls 1.23% to 17,835, South Korea’s Kospi drops 0.45% and Japan’s Nikkei rises 0.74%.
Evergrande, the world's most indebted property developer and the face of China's property crisis, announced late on Sunday that it was unable to issue new debt due to an ongoing investigation into its primary domestic subsidiary, Hengda Real Estate Group Co Ltd. In addition, Hengda disclosed last month that it was under investigation by China's securities regulator for a suspected violation involving the disclosure of information. In response to the news, shares in Evergrande plummeted around 24%, while Hong Kong's Hang Seng leads the losses by falling 1.23% by the press time.
In Japan, the Bank of Japan (BoJ) board members decided to keep its short-term interest rate target of -0.1% and its 10-year bond yield target of around 0% on Friday, as widely expected by the market. Japanese policymakers reaffirmed its easy monetary policy stance until they see Japanese inflation stably maintaining 2%. A dovish stance by BoJ lifted Japanese stock on Monday.
Moving on, investors await Japan’s Tokyo Consumer Price Index (CPI) for September, Industrial Production and Retail Sales due on Friday. The attention will shift to the US Core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred measure of consumer inflation. The annual figure is expected to drop from 4.2% to 3.9%.
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